Deal needed between county, company for grant

Route 11 Potato Chips and Shenandoah County must strike a deal before the business can receive a state expansion grant.

The Virginia Department of Agriculture and Consumer Services awarded a $50,000 grant from the Governor’s Agriculture and Forestry Industries Development Fund to help kick-start the business’ $1.2 million expansion.

Department officials announced the funding award last week, though the county still needs to set up a performance agreement as required under the grant program.

The county also must provide a $50,000 match in order for the company to receive the grant. County Administrator Mary Beth Price has said the county does not have to fund the entire local match up front. Instead, the county can expect the increased revenue collected in machinery and tools tax from the investment to cover the match, Price has explained.

Once the county issues the tax bills and collects the increased revenue, the county will issue a partial rebate in each of the following fiscal years up to $50,000, Price said.

Route 11 has a commitment to add 13 jobs at an average starting salary of $17.15 per hour, county officials have stated. The new jobs created with the addition of a second production line will increase the facility’s workforce by about 40 percent.

Shenandoah County Director of Community Development Brandon Davis recently explained that the performance agreement would outline the parties’ responsibilities.

“So they will have certain thresholds to meet in order to receive funds,” Davis said.

The agreement is under review before it goes to the Board of Supervisors for action.

“I don’t have any indication that the county wouldn’t support the match to the grant,” Davis said.

Davis acknowledged that in some cases the board approves the performance agreement before or at the same time a grant that requires a local match is awarded. When the county entered into performance agreement with Mercury Paper several years ago for a grant through a different state agency program, the board held a meeting concurrently with the announcement. That couldn’t happen this time, Davis noted.

A condition of the grant in this program is that state officials be the first to announce the award. In this instance, Secretary of Agriculture and Forestry Todd Haymore appeared at the news conference at the facility to announce the grant award in the governor’s place.

Each grant requires a performance agreement with “clawback” provisions between the county and the business that details the pledges for the investment, the jobs created and the purchase of Virginia-grown products.

The state determines the grant awards based on the expected amount of jobs created, invested capital, anticipated additional tax revenue, affect on agricultural and forestal producers and a return on investment.

The department sets a deadline by which time the county must execute the performance agreement. Once the county and business approve the agreement, the county may request the approved grant funds.

Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or abridges@nvdaily.com